ORIENTAL INSURANCE CO LTD Vs. RAM KUMAR GARG

JUDGEMENT

(1.) This revision petition has been filed against order dated 23.11.2006 passed by the State Commission, Delhi by which the State Commission has dismissed the appeal of the petitioner Insurance Co. with a modification of reduction in the rate of interest from 10% to 5% earlier allowed by the District Forum and upheld the order of the District Forum accepting the complaint of the respondent subject to this modification.

(2.) The factual matrix of the case are that the complainant who is respondent herein, took a mediclaim policy from OP Insurance Co., petitioners herein, for a period from 9.12.1999 to 8.12.2000 and the beneficiaries of the said policy were the complainant himself, his wife Mrs. Sneh Lata, his daughter Ms. Lalita and his son Manoj Kumar. It is stated that the complainant had earlier taken the mediclaim policy, which was for the period from 8.9.1998 to 7.9.1999. However, when the earlier policy expired on 7.9.1999, the complainant forgot to renew the same within the prescribed grace period but renewed it later from 9.12.1999 for another period of one year. The son of the complainant fell ill on 9.5.2000 and after initial testing conducted at Chawla Diagnostic Centre on 15.5.2000, he was advised to take further treatment at the Escorts Heart Institute. He was accordingly admitted in the Escorts Heart Institute on 17.7.2000 and after operation, he was discharged on 25.7.2000. The complainant informed the OP Insurance Co. vide his letter dated 18.7.2000 about the treatment and admission of his son in the Escorts Institute. On 1.8.2000, the complainant raised a claim of Rs.1,53,530/- towards medical expenses to which the OP failed to respond. A complaint was, therefore, filed by the complainant praying for direction to OP Insurance Co. to pay a sum of Rs.1,50,000/- with interest and compensation as well as cost of litigation. OP resisted the complaint saying that the claim has been repudiated bonafidely in accordance with the exclusion clause 4.3 of the mediclaim policy which precludes reimbursement of expenses for congenital internal disease in the first year of the policy. On merits, it was not denied that the complainant and his family members were covered under the mediclaim policy as stated in the complaint and that the son of the complainant fell ill and got treatment in the Escorts Heart Institute. While admitting that the earlier mediclaim policy has expired on 7.9.1999, it was submitted by the complainant that after some time another mediclaim policy was taken for himself and his members of the family, which was effective from 9.12.1999 to 8.12.2000. However, the complainant submitted that the exclusion clause 4.3 based on which his claim was repudiated, was never brought to his knowledge by the OP Insurance Co. at the time of entering into the contract of mediclaim. The complainant also denied the stand taken by the OP Insurance Co. that he ever signed any agreement with the OP Co. admitting such a clause. It was further submitted by the complainant that existence of the disease in question for which treatment was taken was not within the knowledge of the complainant and hence the OP Insurance Co. is liable to reimburse the medical expenses incurred. Another plea which was taken by the OP Insurance Co. to oppose the claim of the complainant was that the complainant had conspicuously taken higher coverage of medical benefit for his son knowing fully well that his son was suffering from the said heart disease and hence it was a malafide act on his part. Rejecting this plea on the basis of the fact that the complainant had taken the highest coverage for himself and yet had not filed any mediclaim and on appraisal of the evidence adduced before it, the District Forum accepted the complaint and directed the OP Insurance Co. to pay Rs.1,50,000/- with interest @ 10% p.a. from the date of the complaint, i.e., 10.10.2000 till realization along with a sum of Rs.1,000/- as compensation. When this order of the District Forum was carried in appeal before the State Commission by the Op Insurance Co., the appeal came to be dismissed and the order of the District Forum was upheld with reduction in the rate of interest from 10% to 5% and hence the present revision petition by the OP Insurance Co.

(3.) We have heard the counsels and perused the record. During the course of arguments, learned counsel for the Insurance Co. submitted that the mediclaim policy in question was a fresh policy for the period from 9.12.1999 to 8.12.2000 and hence the treatment taken in the first year of the existence of the policy for the specified diseases would be excluded and not covered by the policy. He submitted that as per the undisputed factual position, the disease in question is one of the diseases specifically excluded in clause 4.3 and the treatment taken was in the very first year of the policy. Learned counsel has also referred to the recent order dated 27.4.2011 of the National Commission in the case of Oriental Insurance Co. Ltd. Vs. Pankaj Jain (R.P. No.1265 of 2007) where repudiation of the claim for one of the specified diseases in exclusion clause 4.3 was upheld by the National Commission. In view of this, he submitted that the impugned order is liable to be set aside on similar grounds. On the other hand, learned counsel for the respondent submitted that even though admittedly there was a small gap beyond the permissible grace period, the mediclaim policy which is generally taken on year to year basis was very much by way of renewal of the earlier policy inasmuch as neither there was any modification in the coverage amount in respect of each of the beneficiaries nor there was any change of beneficiaries under the new policy. In view of these undisputed facts, the mediclaim policy in question by all accounts was in continuation of the earlier policy and hence the condition regarding the treatment for the disease being taken in the first year would not be applicable. He submitted that the facts in the case relied upon by the learned counsel for the petitioner were different inasmuch as the amount of coverage in the fresh policy was increased substantially for each of the beneficiary covered by the policy after the expiry of the earlier policy while taking a fresh policy. He further submitted that there was no fresh proposal in the present case and the document which has been claimed to be the fresh proposal by the petitioner Co. is a document produced by way of afterthought and the same neither has any date of the proposal nor there is any reference to fresh medical examination. The ruling of the National Commission in the case of Pankaj Jain s revision petition will, therefore, not get attracted to the facts and circumstances of the present case. Continuing his arguments, learned counsel further submitted that there is no averment by the Insurance Co. regarding either prior knowledge about the disease in question or suppression of any material facts in this regard by the respondents. He contended that even if a disease is congenital, the complainant had absolutely no idea about the existence thereof and hence it cannot be called a pre-existence disease as would render the claim of the complainant invalid. Keeping in view the peculiar facts and circumstances of this case, learned counsel submitted that the view taken by the National Commission in the case of Jagmohan Bhatia Vs. Oriental Insurance Co. Ltd., 2003 2 CPJ 191 would be applicable and hence in the absence of any fresh proposal or medical tests or change in any of the parameters of the earlier mediclaim policy, the condition in respect of the exclusion of the treatment of the specified disease in the first year of the policy would not be applicable as decided by the National Commission in Jagmohan Bhatia s case where the facts and circumstances were similar as in the present case. Learned counsel relied on the ratio of another case decided by the National Commission on 11.9.2009 in LIC and Anr. Vs. Anil Kumar Rastogi,2010 CPJ 134 in support of his contention. He specifically relied on the following observations of this Commission contained in para 12 of its order:-